Investors check out of gold ETFs amid market volatility

Global uncertainties like trade tensions are likely to drive gold prices higher and prompt more profit-taking

- Abhinaba Saha

Retail investors grabbed a golden opportunity to book profits on gold in March as heightened market volatility and stock price corrections soured their return expectations from equities. Equity fund inflows fell to an 11-month low last month, while investors cashed out on the precious metal, capitalizing on its outperformance during these uncertain times.

According to the latest data from the Association of Mutual Fund Industry (Amfi), released Friday, gold exchange-traded funds (ETFs) saw net outflows of around ₹77 crore in March—the first time in over a year—as investors rushed to take gains amid soaring gold prices.

"Gold has been consistently hitting all-time highs since the start of the year. Hence, people who invested in the past six months or maybe a year back might have booked profits in March," said Satish Dondapati, manager of passive funds at Kotak Mutual Fund.

To be sure, gold has outperformed every other asset class globally, including equities and debt, returning around 23% so far this year. Last week it shot up 6% to touch a new high of $3,235.89 per ounce.